Latest news with #Japan-led
Yahoo
28-05-2025
- Business
- Yahoo
Japan's bond selloff is a warning to the world
On Wednesday, demand for Japan's 40-year government bonds plunged to its lowest level since last July, reinforcing fears that appetite for ultra-long Japanese debt is evaporating. The lopsided supply-demand dynamic followed a similarly disastrous 20-year auction last week — the worst since 2012 — and comes after a month of heavy selling across Japan's 'super-long' bond market. Together, the flops suggest that confidence in long-dated Japanese government bonds is breaking down, despite an emergency signal from Japan's Ministry of Finance that it may scale back issuance of longer maturities to calm the market. And briefly, the announcement did soothe rattled investors across the globe, helping to push down yields across Asia, the UK, and the U.S. Analysts now say Japan's shift toward issuing bonds with shorter maturities could become a global test case for how governments manage growing fiscal stress. But if Wednesday's auction is any indication, investors remain unconvinced because demand for long-end debt is still deteriorating. And while it may be less consequential, a storm of chatter on X and YouTube (GOOGL) — where armchair analysts warn of a Japan-led global debt spiral — suggests concerns are resonating far beyond institutional desks. Here's a quick explainer. Japan's 30- and 40-year bond yields have recently soared to record highs (3.2% and 3.5%, respectively) after years of being stuck near zero. It's a jarring move for a country where the official policy rate, per the Bank of Japan, is around 0.5%. Auctions are failing, with long-dated debt buyers stepping aside even as supply remains strong. What's more, insurers are reeling. Four major Japanese life insurers reported $60 billion in paper losses last quarter, quadruple last year's total. Nippon Life alone saw $25 billion in unrealized losses. With debt-to-GDP at 260% and the Bank of Japan already owning more than half of outstanding Japanese government bonds, the country's leadershop boxed in. The BOJ is no longer stepping in to buy more. Inflation is up while real wages are down and GDP is shrinking. That leaves Japan trapped between raising rates and risking recession, or holding steady and letting inflation and yields run even hotter. Like Japan, the U.S. is flooding the market with long-term debt at just the moment buyers are growing fatigued and wary. Last week, low-demand Treasury auctions and a Trump-backed, deficit-swelling tax bill pushed 30-year yields above 5% and 10-year yields past 4.5%. While yields have since dipped, the bigger problem of too much supply and not enough demand remains. And if Japan can't sustain confidence even after decades of ultra-loose policy, it raises urgent questions about how other governments plan to survive their own reckoning. For the latest news, Facebook, Twitter and Instagram. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New Straits Times
10-05-2025
- Business
- New Straits Times
Japan sees Malaysia as key Asean partner in advancing clean energy
KUALA LUMPUR: Japan regards Malaysia as playing a crucial role in advancing clean energy cooperation in Southeast Asia, particularly in its role as this year's Asean Chair and co-host of the Asia Zero Emissions Community (AZEC) ministerial meeting. Former Japanese Prime Minister Fumio Kishida said Malaysia's leadership comes at a pivotal time for regional decarbonisation efforts, with numerous AZEC-related projects already in progress. "As this year's Asean Chair and co-host country of the AZEC ministerial meeting, Malaysia plays a crucial role in advancing various decarbonisation projects across the region," he said. Kishida, who was on a two-day working visit to Malaysia, is also the Supreme Adviser to the Parliamentary Association of AZEC. He said that current AZEC initiatives span areas such as power transmission, distribution, and renewable energy, which are expected to align closely with Asean's clean energy efforts. "We expect these efforts to create strong synergies with Asean initiatives, including the Asean Power Grid concept," he added. AZEC is a Japan-led initiative launched in 2022 to promote decarbonisation across Asia through regional collaboration, technology transfer and public-private partnerships. The initiative aims to balance climate action with sustainable economic growth, particularly in emerging economies. Kishida, who is also the Special Envoy of the Japanese Prime Minister, said Tokyo sees Malaysia as a "very reliable partner" that has taken active steps towards its energy transition, inspired partly by AZEC. "I see great potential for collaboration between our two countries in advancing decarbonisation," he said, noting that ongoing cooperation covers projects in carbon capture and storage (CCS), ammonia, sustainable aviation fuel (SAF), and power grid development. "During this visit, I strongly felt both the diversity of needs related to decarbonisation in the Southeast Asian region and the high expectations placed on Japan, as many projects are already underway," he said. Kishida noted that site visits and engagement with businesses had reinforced the importance of the government taking the lead in building effective partnerships with regional counterparts. He also emphasised the growing role of Japan's AZEC Parliamentary League in promoting the initiative from a legislative perspective. "As a parliamentary group, we hope to contribute to the promotion of AZEC from a uniquely parliamentary perspective by leveraging each member's broad network and facilitating dialogue with partner countries, businesses and other stakeholders," he said. Looking ahead to upcoming ministerial and summit-level meetings, Kishida added that the group intends to submit formal recommendations to the Japanese government based on the outcomes of this visit to support AZEC's progress further.
The Sun
06-05-2025
- Business
- The Sun
Malaysia, Japan reaffirm ties to advance regional decarbonisation under AZEC
KUALA LUMPUR: Malaysia and Japan have reaffirmed their commitment to advancing regional decarbonisation and sustainable growth under the Asia Zero Emissions Community (AZEC) initiative, reflecting shared efforts to strengthen cooperation on clean energy and climate resilience. The pledge was made during the courtesy call by former Japanese Prime Minister Fumio Kishida on Prime Minister Datuk Seri Anwar Ibrahim in Putrajaya on Tuesday, held in conjunction with Kishida's two-day working visit to Malaysia to attend the AZEC summit in the capital. Kishida, who is also the Supreme Adviser to the Parliamentary Association of AZEC, said they exchanged views on decarbonisation, regional cooperation and global economic challenges. 'We talked about how Japan and Malaysia, together with like-minded countries in the region, can play a leading role in achieving decarbonisation while maintaining sustainable development,' he told a press conference attended by local and international media here. AZEC is a Japan-led initiative launched in 2022 to promote decarbonisation across Asia through regional collaboration, technology transfer and public-private partnerships. It aims to strike a balance between carbon neutrality and economic growth, particularly in emerging economies. Kishida reaffirmed Japan's commitment to work with Malaysia in advancing AZEC, adding that Tokyo aimed to contribute to Asia's 400 trillion yen funding needs through its technological and financial capabilities. Kishida, who is also the Special Envoy of the Japanese Prime Minister, conveyed a letter from Japanese Prime Minister Shinjiro Ishiba to Anwar and explained the purpose of his visit, which also addressed broader issues, including the global economy. He also said that Anwar responded with a clear intention to continue working closely with Japan, adding, 'I truly appreciate his proactive and forward-looking approach.' In a lighter moment, Kishida shared a video on his official X account showing his exchange with Anwar about durian, fondly recalling enjoying the fruit during his previous visit to Malaysia — prompting laughter and a lively conversation. Earlier in his speech, Kishida shared that his visit to Indonesia and Malaysia had highlighted the diverse decarbonisation needs across Southeast Asia. 'During the visit to both nations, I felt firsthand the high expectations placed on Japan and the wide variety of decarbonisation needs and active projects across Southeast Asia. 'Through site visits and exchanges with businesses, I reaffirmed the importance of governments taking the lead in building partnerships with host countries,' he said. He said that Japan had formed a parliamentary league dedicated to AZEC, which would work alongside partner countries, businesses and other stakeholders to promote the initiative. 'As a parliamentary league, we hope to utilise the wide-ranging networks of each member and contribute to the advancement of AZEC by engaging with partner countries, companies and other stakeholders from a parliamentary perspective,' he said.
Asia Times
26-02-2025
- Business
- Asia Times
If Trump attempts World Bank retreat, China-led AIIB could step in
Donald Trump's animosity toward multilateralism and international organizations is well known. Just hours after taking office on January 20, 2025, the US president announced his intention to withdraw from the World Health Organization and the Paris agreement on climate change. Could the International Monetary Fund and the World Bank be next? Certainly, supporters of the twin institutions – that have formed the backbone of global economic order for 80 years – are concerned. A Trump-ordered review of Washington's support of all international organizations has led to fears of the US reducing funding or pulling it altogether. But any shrinking of U.S. leadership in international financial institutions would, I believe, run counter to the administration's ostensible geopolitical goals, creating a vacuum for China to step into and take on a bigger global role. In particular, weakening the World Bank and any other multilateral development bank, or MDB, that has a large US presence could present an opportunity for a little-known, relatively new Chinese-led international organization: the Asian Infrastructure Investment Bank – which, since its inception, has supported the very multilateralism the U.S. is attacking. The Asian Infrastructure Investment Bank (AIIB) was created by China nine years ago as a way to invest in infrastructure and other related sectors in Asia, while promoting 'regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions.' Since then, it has served as an example of an international body willing to cooperate deeply with other major multilateral organizations and follow international rules and norms of development banking. This may run counter to the image of Beijing's global efforts portrayed by China hawks, of whom there are many in the Trump administration, who often present a vision of a China intent on undermining the Western-led liberal international order. But as a number of scholars and other China experts have suggested, Beijing's strategies in global economic governance are often nuanced, with actions that both support and undermine the liberal global order. As I explore in my new book, it is clear that today the AIIB is a paradox: an institution connected to the rules and norms of the liberal international order, but one created by an illiberal government. Chinese Finance Minister Lou Jiwei speaks during the signing ceremony of the Asian Infrastructure Investment Bank on Oct. 24, 2014, in Beijing. Photo: Takaki Yajima / POOL The AIIB is deeply tied to the rules-based order as displayed through its many cooperative connections with other major multilateral development banks, such as the World Bank and the Japan-led Asian Development Bank. As such, the AIIB may present a Chinese counterpoint in a landscape where US leadership is receding. For decades, multilateral development banks have served the important task of lending billions of dollars a year to support economic and social development. They can be vital sources of funding for poverty reduction, inclusive economic growth and sustainable development, with a newer emphasis on climate change. These international lenders have also been remarkably durable in today's climate of fragmentation and crisis, with member nations actively considering ways of further strengthening them. At the same time, MDBs perennially face criticism from civil society organizations that highlight areas of weak performance and are concerned about potential downsides of the major MDBs' greater emphasis on working more closely with the private sector. MDB expert Chris Humphrey has also noted that major 'MDBs were built around a set of geopolitical and economic power relationships that are coming apart before our eyes.' When Chinese President Xi Jinping in 2013 proposed creating the AIIB to lend for infrastructure development in Asia, there was a lot of suspicion among major nations about China's intentions. The Obama administration responded to the move by urging other countries not to join. Its concern was that China would use lending to gain further influence in the region, but without adhering to strong environmental and social standards. Nonetheless, all the other major nonborrowing nations, with the exception of Japan, joined the new bank. Today, the AIIB is the second-largest multilateral development bank in terms of member countries, behind only the World Bank. It currently has 110 member nations, which translates to over 80% of the global population. With US$100 billion in capital, it is one of the medium-sized multilateral lenders. From the get-go, the AIIB was designed to be cooperative. Jin Liqun, who became the bank's first president, is a longtime multilateralist with a long career at China's finance ministry and past positions on the boards of the World Bank and the Global Environmental Facility, as well as a vice presidency of the Asian Development Bank. The international group of experts that helped design the AIIB also included former executive directors and staff from the IMF and other development banks, as well as two Americans with long careers at the World Bank who played leading roles in designing the bank's articles of agreement and its environmental and social framework. The bank fits into the landscape of other multilateral development banks in a variety of ways. The AIIB's charter is directly modeled on the Asian Development Bank's foundation, and built into the AIIB's charter is the bank's mission of promoting 'regional cooperation and partnership in addressing development challenges.' The AIIB shares similar norms and policies with other major multilateral development banks, including its environmental and social standards. Alongside borrowing foundational principles, the AIIB also works in close conjunction with its peers. The World Bank initially ran the AIIB's treasury operations. The AIIB has also co-financed a high percentage of its projects with other multilateral development banks, particularly in its first years. In a recent sign of cooperation, in 2023, a deal between the AIIB and World Bank's International Bank for Reconstruction and Development (IBRD) saw the AIIB issue up to $1 billion in guarantees against IBRD sovereign-backed loans. This increased the IBRD's ability to lend more money, while diversifying the AIIB's loan portfolio. As of February 6, 2025, the AIIB had 306 approved projects totaling $59 billion. Energy and transportation are its two largest sectors of lending. Recently approved projects include loans to support wind power plants in Uzbekistan and Kazakhstan, and a solar plant in India. India, which has a bumpy relationship with China, is one of the bank's largest borrowers, along with Turkey and Indonesia. From its birth until recently, the multilateral AIIB has repeatedly distinguished itself from China's bilateral initiatives. Chief among those is China's Belt and Road Initiative, an umbrella for infrastructure lending by Chinese institutions that has been criticized for lacking transparency and accountability. Indeed, some Belt and Road-linked projects have faced concerns about corruption, costs and the opacity of the loan agreements. In the past several years, the AIIB has made more mention of synergy with Belt and Road lenders, and the bank now hosts the secretariat of a facility, the Multilateral Cooperation Center for Development Finance, that offers grants and support to developing countries seeking to finance infrastructure in countries where Belt and Road lending takes place. This may blur the line between the AIIB and lending under the Belt and Road umbrella, but it does not appear to weaken the bank's standards. Concerns about the level of Chinese government influence at the AIIB are not new. Canada froze its ties with the bank in June 2023, pending a review of allegations by a Canadian staff member, who dramatically quit after accusing the bank of being dominated by members of China's Communist Party. No other member nations expressed such concern, and Canada has not yet published any review. A group of AIIB executive directors oversaw an internal review that found no evidence to support the allegations. As the new US administration formulates its policies toward China, it would do well to take into account the variation in China's strategies in global economic governance, as a recognition of areas of cooperation, competition and conflict requires more nuanced responses. In many areas, the US will both cooperate and compete with China. Paradoxically, any moves by the Trump administration to pull back from multilateral organizations may leave the AIIB, whether or not it is an anomaly, in a position to offer a better model of cooperation than leading multilateral development banks with a powerful US. role. Tamar Gutner is an associate professor at American University. This article is republished from The Conversation under a Creative Commons license. Read the original article.
Yahoo
25-02-2025
- Business
- Yahoo
If US attempts World Bank retreat, the China-led AIIB could be poised to step in – and provide a model of global cooperation
Donald Trump is no fan of international organizations. Just hours after taking office on Jan 20, 2025, the U.S. president announced his intention to withdraw from the World Health Organization and the Paris agreement on climate change. Could the International Monetary Fund and the World Bank be next? Certainly, supporters of the twin institutions – that have formed the backbone of global economic order for 80 years – are concerned. A Trump-ordered review of Washington's support of all international organizations has led to fears of the U.S. reducing funding or pulling it altogether. But any shrinking of U.S. leadership in international financial institutions would, I believe, run counter to the administration's ostensible geopolitical goals, creating a vacuum for China to step into and take on a bigger global role. In particular, weakening the World Bank and other multilateral development banks, or MDBs, that have a large U.S. presence could present an opportunity for a little-known, relatively new Chinese-led international organization: the Asian Infrastructure Investment Bank – which, since its inception, has supported the very multilateralism the U.S. is attacking. The Asian Infrastructure Investment Bank (AIIB) was created by China nine years ago as a way to invest in infrastructure and other related sectors in Asia, while promoting 'regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions.' Since then, it has served as an example of an international body willing to deeply cooperate with other major multilateral organizations and follow international rules and norms of development banking. This may run counter to the image of Beijing's global efforts portrayed by China hawks, of which there are many in the Trump administration, who often present a vision of a China intent on undermining the Western-led liberal international order. But as a number of scholars and other China experts have suggested, Beijing's strategies in global economic governance are often nuanced, with actions that both support and undermine the liberal global order. As I explore in my new book, it is clear that today the AIIB is a paradox: an institution connected to the rules and norms of the liberal international order, but one created by an illiberal government. The AIIB is deeply tied to the rules-based order as displayed through its many cooperative connections with other major multilateral development banks, such as the World Bank and the Japan-led Asian Development Bank. As such, the AIIB may present a Chinese counterpoint in a landscape where U.S. leadership is receding. For decades, multilateral development banks have served the important task of lending billions of dollars a year to support economic and social development. They can be vital sources of funding for poverty reduction, inclusive economic growth and sustainable development, with a newer emphasis on climate change. These international lenders have also been remarkably durable in today's climate of fragmentation and crisis, with member nations actively considering ways of further strengthening them. At the same time, MDBs perennially face criticism from civil society organizations who highlight areas of weak performance and are concerned about potential downsides of the major MDBs' greater emphasis on working more closely with the private sector. MDB expert Chris Humphrey has also noted that major 'MDBs were built around a set of geopolitical and economic power relationships that are coming apart before our eyes.' When Chinese President Xi Jinping in 2013 proposed creating the AIIB to lend for infrastructure development in Asia, there was a lot of suspicion among major nations about China's intentions. The Obama administration responded to the move by urging other countries not to join. Its concern was that China would use lending to gain further influence in the region, but without adhering to strong environmental and social standards. Nonetheless, all the other major nonborrowing nations, with the exception of Japan, joined the new bank. Today, the AIIB is the second-largest multilateral development bank in terms of member countries, behind only the World Bank. It currently has 110 member nations, which translates to over 80% of the global population. With US$100 billion in capital, it is one of the medium-sized multilateral lenders. From the get-go, the AIIB was designed to be cooperative. Jin Liqun, who became the bank's first president, is a longtime multilateralist with a long career at China's finance ministry and past positions on the boards of the World Bank and the Global Environmental Facility, as well as a vice presidency of the Asian Development Bank. The international group of experts that helped design the AIIB also included former executive directors and staff from the IMF and other development banks, as well as two Americans with long careers at the World Bank who played leading roles in designing the bank's articles of agreement and its environmental and social framework. The bank fits into the landscape of other multilateral development banks in a variety of ways. The AIIB's charter is directly modeled on the Asian Development Bank's foundation, and built into the AIIB's charter is the bank's mission of promoting 'regional cooperation and partnership in addressing development challenges.' The AIIB shares similar norms and policies with other major multilateral development banks, including its environmental and social standards. Alongside borrowing foundational principles, the AIIB also works in close conjunction with its peers. The World Bank initially ran the AIIB's treasury operations. The AIIB has also co-financed a high percentage of its projects with other multilateral development banks, particularly in its first years. In a recent sign of cooperation, in 2023, a deal between the AIIB and World Bank's International Bank for Reconstruction and Development (IBRD) saw the AIIB issue up to $1 billion in guarantees against IBRD sovereign-backed loans. This increased the IBRD's ability to lend more money, while diversifying the AIIB's loan portfolio. As of Feb. 6, 2025, the AIIB has 306 approved projects totaling $59 billion. Energy and transportation are its two largest sectors of lending. Recently approved projects include loans to support wind power plants in Uzbekistan and Kazakhstan, and a solar plant in India. India, which has a bumpy relationship with China, is one of the bank's largest borrowers, along with Turkey and Indonesia. From its birth until recently, the multilateral AIIB has repeatedly distinguished itself from China's bilateral initiatives. Chief among those is China's Belt and Road Initiative, an umbrella term for infrastructure lending by Chinese institutions that has been criticized for lacking transparency and accountability. Indeed, some Belt and Road Initiative-linked projects have faced concerns about corruption, costs and the opacity of the loan agreements. In the past several years, the AIIB has made more mention of synergy with Belt and Road lenders, and the bank now hosts the secretariat of a facility, the Multilateral Cooperation Center for Development Finance, that offers grants and support to developing countries seeking to finance infrastructure in countries where Belt and Road lending takes place. This may blur the line between the AIIB and lending under the Belt and Road umbrella, but it does not appear to weaken the bank's standards. Concerns about the level of Chinese government influence at the AIIB are not new. Canada froze its ties with the bank in June 2023, pending a review of allegations by a Canadian staff member, who dramatically quit after accusing the bank of being dominated by members of China's Communist Party. No other member nations expressed such concern, and Canada has not yet published any review. A group of AIIB executive directors oversaw an internal review that found no evidence to support the allegations. As the new U.S. administration formulates its policies toward China, it would do well to take into account the variation in China's strategies in global economic governance, as a recognition of areas of cooperation, competition and conflict requires more nuanced responses. In many areas, the U.S. will both cooperate and compete with China. Paradoxically, any moves by the Trump administration to pull back from multilateral organizations may leave the AIIB, whether or not it is an anomaly, in a position to offer a better model of cooperation than leading multilateral development banks with a powerful U.S. role. This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Tamar Gutner, American University Read more: Why everyone's joining the Asian Infrastructure Investment Bank How Elon Musk's deep ties to – and admiration for – China could complicate Trump's Beijing policy How allies have helped the US gain independence, defend freedom and keep the peace – even as the US did the same for our friends Tamar Gutner does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
